China surpassed the United States. I know what you thinking, that this is going to be a depressing piece about how China is going to rule the economic world. Well you are wrong. What this story is about is the power of the markets and U.S. ingenuity and the capitalist system. You see when the U.S. was challenged by rising oil prices and the threat of peak oil, we built a better mousetrap. The Energy Information Administration just reported that China overtook the U.S. as the world's largest net oil importer...
Oh sure, part of the story is the explosive growth that we have seen in China. Of course that growth was ignited by a movement toward capitalism not to mention historically low oil prices (NYMEX:CLX13). Yet it is the power of free markets and man's desire to make a profit that actually created this historic shift in the global energy markets. That is a positive story and a reason why the USA the world largest economy will continue to be a force that is reckoned with.
The AP reported that China passed the United States in September as the world's biggest net oil importer, driven by faster economic growth and strong auto sales, according to U.S. government data released this week. Chinese oil consumption outstripped production by 6.3 million barrels per day, which indicates the country had to import that much to fill the gap, the Energy Information Administration said this week.
"China's steady growth in oil demand has led it to become the world's largest net oil importer, exceeding the United States in September 2013,'" the agency said in a report. "EIA forecasts this trend to continue through 2014." China's economic boom has raised incomes and increased its global influence. But it also has spurred demand for imported oil and gas, which communist leaders see as a strategic weakness. Rising auto ownership has left China's cities choking on smog and added to pressure on Beijing from its own public to curb pollution and from other nations to rein in surging greenhouse gas emissions.
The United States, with a population about one-third the size of China's, still consumes far more oil per person than China does. In September, Americans used 18.6 million barrels per day of oil and other liquid fossil fuels, while China used 10.9 million, according to the EIA's Short-Term Energy Outlook. U.S. production was 12.5 million barrels per day, while that of China was 4.6 million. China's economy, the world's second-largest, is cooling but still is forecast to grow by nearly 8% this year, well above forecasts for the U.S.
Today's Wall Street Journal says that this is raising tensions. The Journal says that China's OPEC-crude imports during this year's first half averaged 3.7 million barrels a day, versus 3.5 million for the U.S., according to Wood Mackenzie, a consulting firm. At that rate, its OPEC imports will surpass America's on an annual basis for the first time this year, Wood Mackenzie said. India ranked No. 3, at about 3.4 million barrels a day. In 2004, the U.S. imported about 5 million barrels a day from OPEC, and China imported about 1.1 million, Wood Mackenzie said. An OPEC official declined to say whether China is now the bloc's top customer.
China's imports have surged in recent years from OPEC nations such as Saudi Arabia, Iraq and the United Arab Emirates, according to Chinese customs data. China is trading places with the U.S. by some other measures as well. The U.S. is still No. 1 in crude imports from the entire world. But new data from the U.S. Energy Information Administration show China has slightly overtaken the U.S. in net oil imports, defined as total liquid-fuels consumption minus domestic production. China's net imports were 6.30 million barrels a day in September, versus U.S. net imports of 6.24 million, the EIA data show; the U.S. energy-production boom has helped push down its net-import figure. And China will soon import more from the Persian Gulf than the U.S. did at its 2001 peak, according to EIA and Chinese customs data. It surpassed the U.S. as a buyer of Persian Gulf crude in 2009, according to the data.